Urban Company Limited (formerly UrbanClap) has received a GST demand of over ₹56 crore, according to a regulatory filing made by the company to the stock exchanges today.
The order, passed on December 19, 2025, by the Joint Commissioner, CGST & Central Excise, Thane, outlines a total demand of Rs 51,30,32,855 in unpaid GST for the period of April 2021 to March 2025. Additionally, the authority has imposed a penalty of ₹5,13,03,286, plus applicable interest.
The company in a regulatory filing said that the crux of the dispute lies in the interpretation of Section 9(5) of the CGST Act. Urban Company has been discharging GST at a rate of 5% for payments made to professionals providing plumbing, carpentry, electrician, and cleaning services, classifying these under housekeeping services. However, the GST authority has taken a broader view, ruling that the scope of housekeeping services also extends to appliance repair, appliance servicing and painting services.
The tax demand has been raised specifically on the payouts made to professionals rendering these additional services.
Urban Company has expressed its intention to challenge the order, stating they believe they have a strong case on merits backed by advice from external legal and tax experts. "The Company will be filing an appeal against the order before the appropriate authority," the filing stated. Despite the substantial amount, the company clarified that the order is not expected to impact its financial, operational, or other activities.
According to Section 9 (5) of the CGST Act, for services rendered through an e-commerce operator, such as restaurant services, including cloud kitchens, housekeeping and accommodation services, and motor cabs, the liability of tax falls on the e-commerce operator. The e-commerce operator (in this case Urban Company) is liable to collect a 5% on behalf of the consumers and deposit it to the government. However, maintenance and servicing of electric appliances attract 18% GST.